Benefits from water resource tax

Climate crises are expected to exacerbate water scarcity. As a result, water management has become a priority for policymakers. The Chinese government has recently issued the “Water Resources Tax Reform” to strengthen the management, protection, and promotion of the conservation and safe use of water resources.

From December 1, the Ministry of Finance , the State Administration of Taxation and the Ministry of Water Resources of China will comprehensively implement the pilot measures of the new regulation, applying water resource tax to replace water resource fee. The comprehensive implementation of the pilot program mainly follows the principle of smooth transition, strengthens classification regulations, reflects regional differences and mobilizes local initiative.

A section of the Yellow River

According to the new regulations, the subjects of water resource tax are organizations and individuals directly exploiting water resources from rivers, lakes (including water resource allocation projects such as reservoirs, water diversion projects) and underground. Water resource tax is levied on a quantitative basis, with the tax amount varying based on water resource conditions, water consumption types and economic development.

After the pilot program to replace water resource fees with taxes is fully implemented, all water resource tax revenue will belong to local governments, in order to strengthen local financial independence.

China's water resources are scarce, with per capita water resources only one-quarter of the world average. In order to promote the construction of resource-saving and environmentally friendly cities, raise people's awareness of water resource protection and water efficiency, and promote the formation of a green development lifestyle, since July 1, 2016, China has implemented pilot projects for water resource tax reform in 10 provinces, autonomous regions, and municipalities directly under the Central Government, including Hebei, Beijing, and Tianjin.

Some studies have argued that water resource tax increases the burden on taxpayers and is not conducive to water conservation. However, the reform pilot has achieved remarkable results in curbing over-exploitation of groundwater, changing water use methods, and promoting water-saving transformation.

As the water resource tax increases the tax burden on water consumption, entities are encouraged to adopt new water conservation technologies. This approach has long been considered a powerful approach to water conservation and changing water use patterns in high-consuming sectors.

In addition, the compulsory nature of the tax also helps raise awareness and makes each unit in general and individual consumers in particular realize the scarcity of water resources and move towards sustainable water consumption. Finally, the revenue collected from the tax can be invested in protecting and restoring water resources.

China’s implementation of a water resource tax and fee policy is well suited to scientific assessment of the net impact of water scarcity, which Frontiers says is also an important component of water poverty reduction strategies. “Water poverty” is a multidimensional concept that goes beyond water scarcity and focuses specifically on the social and economic aspects of water resource management.

HAPPY CHI

Source: https://www.sggp.org.vn/loi-ich-tu-thue-tai-nguyen-nuoc-post763993.html